Finance / Paraguay
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Soy Story
June 2005 | Currency ForecastSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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The guarani has rallied by over 4% since mid-February, from PYG6310.00/US$ to PYG6035.00/US$, after having experienced a sharp sell-off throughout H204. The strength can largely be attributed to high prices for the country's main export commodity, soy, which represents 10% of GDP. Further upside could be ahead, with potential gains to the key resistance level of PYG5900.00/US$. Beyond that, 2004's high of PYG5650.00/US$ represents the next target, but against a backdrop of uninspiring economic fundamentals, we are not convinced that the currency will acquire sufficient momentum to attain this target.